Part 7

Don't Fight the Fed: The Fed is The Most Powerful Entity in the Financial World

Breaking rocks in the hot sun, you fought the Fed and the Fed won. Why does the Fed have a bazooka and why are they taking away a punch bowl? Why are investors never supposed to directionally challenge what the Federal Reserve is doing? Because the Federal Reserve is the most powerful entity in the financial world due to its outsized power in controlling liquidity. If the market was a farm, the Fed basically controls the water supply. It controls the Federal Funds rate which then in turn influe...

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